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Nannies first to go as City job losses and pay cuts hit home
Jonathan Prynn and Sri Carmichael19 Sep 2008
The after-shocks of this week's global banking crisis are already starting to sweep through the London economy.
With 4,000 Lehman Brothers workers losing their jobs and tens of thousands more facing redundancy or huge pay cuts the ripple effects are being felt throughout "the bonus belt" of west and central London.
Rental agent Cluttons says several tenants who had been bankers at Lehmans have immediately given notice on properties in areas such as Belgravia and Wapping that they can no longer afford.
The top end of the property market, which has been relatively unscathed to date, is now much more affected.
Ed Davey of London agents Douglas and Gordon said: "The events of the past week have made a lot of wealthy people in London suddenly say 'hang on a minute, this is affecting me'.
"We have seen a lot of owners in the £2million to £4million bracket come to us and say, 'that offer I had at 15 per cent below the asking price ... is it still there?'"
Dozens of highly paid nannies have been laid off after their employers found themselves out of work.
Kate Barker, director of Abbeville Nannies, said: "There will be a lot more dads in the park after this week. If both parents are working and one loses their job then virtually the first thing they do is put the nanny out of a job."
Nannies in areas such as Clapham, Wandsworth and Battersea now cost about £500 a week after tax, equivalent to a salary of £35,712 a year.
Ms Barker added maternity nurses are also finding it harder to find work as demand dries up. She said: "They are getting bigger and bigger gaps in their bookings. They are seen as a top end luxury."
Expensive private clubs favoured by bankers are facing a flood of membership cancellations.
One banker said: "The waitresses at Eight in Bank say people are being noticeably more careful and keeping a lid on their bar bills."
Life at work has also become more spartan as the credit crunch bites. One executive at a major City bank said: "Some of the high-level staff used to take private planes to the US for meetings but they've by and large switched to scheduled flights.
"The banks can't afford to throw away money on things like that when they don't feel safe.
"Expenses generally have been slashed and people have had to go further and further up the management line to get them signed off.
"This week I heard global heads were personally checking middle level employees' expenses. And even vice presidents are having their spending cut and scrutinised. There's no leeway for indulgence any more." Headhunting firms have been inundated with CVs and hits on job site efinancial.com have soared. Staff at Morgan Stanley, once one of the City's elite but now forced to seek a merger partner, were among them.
One insider said: "Staff there are sh**ting themselves. Many spent more time making contact with headhunters, just in case, and looking at job sites than working. Any optimism's gone, it's a weird atmosphere and everyone feels vulnerable."
Those who could be hardest hit by the Lehman's collapse are the graduate trainees. One former high level banker there said: "It could seriously be over for them career wise.
"They might have a week, a year, even two years' experience but what does that amount to, really? It just looks like an extended period of work experience.
"And you know what young people are like when they get money for the first time - they overspend, don't save. It's going to really hurt the graduates when the pay stops coming in."
One banker told how a redundant Lehman's vice president was putting a brave face on his fate: "He was trying to sound bullish and said he could probably last 12 months without a job, but then he admitted that would mean massive changes to his lifestyle. If he doesn't get another job within a few weeks he'll be cancelling the exotic family holiday at Christmas and generally living a far more frugal life."
Even the little details tell of a more austere era after the long years of plenty. One hedge fund executive said his firm had cut down on the free food previously available in the office: "There are no more Innocent smoothies and they've down-graded to normal crisps from kettle chips."
Reader views (6)
I particularly love the bits about some of them having to cut down from private flights to regular scheduled ones that we peasants normally take, and about having to cancel the luxurious christmas holiday...it's difficult to feel sorry for these people when you consider that for some it will mean cutting back on day to day necessities and not luxuries!
- Faye, Bristol, UK, 22/09/2008 11:32
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This article sums up everything that has gone so seriously wrong with our society.
- Iain, Covent Garden, 22/09/2008 10:17
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What a choker.
- Jimbob, Kensington, 22/09/2008 08:31
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I can't decide whether this article is tongue-in-cheek satire or deadly serious. Either way, however, it's very very amusing!
- Shawn, SE France, 19/09/2008 13:05
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I wonder if all those joyous "working class heroes" (a tag they like to give themselves) are still rejoicing at the loss of so many city jobs?
- St, london, 19/09/2008 12:53
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"There are no more Innocent smoothies and they've down-graded to normal crisps from kettle chips." - my heart bleeds for those poor people. Welcome to the real world....
- Jane, Middlesex, 19/09/2008 12:36
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